In a move that left both Wall Street and Silicon Valley reeling, Tesla shareholders overwhelmingly approved a pay package for CEO Elon Musk that could be worth around $1 trillion—if a sweeping set of performance targets over the next decade is met. This deal, ratified on November 6, 2025, is being called the largest corporate compensation package in history. But far more than a simple reward, Musk’s new stock award framework is a bet on his ability to steer Tesla into its next era: artificial intelligence, autonomous driving, robotaxi fleets, and humanoid robots.

This investigation dives into the mechanics of the deal, the risks and controversies surrounding it, and what it means for Tesla, Musk, and the broader future of business.

The Deal: Structure and Stakes

What Was Approved

At its annual shareholder meeting in Austin, Texas, more than 75% of the votes cast supported the performance-based pay proposal for Elon Musk.

Under this deal, Musk could be granted up to 423 million additional Tesla shares, which would raise his ownership stake in the company to approximately25%, depending on future performance.

Unlike a simple cash bonus, this compensation is entirely equity-based, structured into 12 tranches tied to a set of ambitious milestones. The Performance Milestones

To unlock the full payout, Musk must deliver on a broad and aggressive set of goals over a10-year period. These include:

Market capitalization growth: Tesla must grow its valuation from today’s roughly $1.5 trillion to about$8.5 trillion.

Vehicle deliveries: One of the targets is delivering 20 million Tesla vehicles cumulatively.

Autonomous mobility: The plan requires operating 1 million robotaxis in commercial service.

Humanoid robotics: Tesla must deliver 1 million Optimus robots, its humanoid AI-powered machines.

Profitability: There are also financial targets: Musk has to drive Tesla to sustained, very high core earnings.

Tenure: Musk is required to remain CEO for at least 7.5 years to begin vesting any of these tranches.

Succession plan: A “long-term framework” for a successor must be presented under the deal’s terms.

Why Tesla Did It: The Board’s Rationale

Retaining Musk

According to Tesla’s board, keeping Musk tied to the company is critical. Board Chair Robyn Denholm warned that if the package were rejected, Musk might walk away. In her communications with shareholders, she argued that losing him would risk Tesla’s strategic future — especially as the company pivots to AI and robotics.

Musk himself has said he needs significant influence over Tesla’s direction. He reportedly wants enough voting control “to give a strong influence, but not so much that I can’t be fired if I go insane.”

Aligning Incentives with Vision

Tesla’s board defended the package as a way to align Musk’s long-term incentives with those of shareholders. Rather than a guaranteed reward, the grant is contingent on transforming Tesla from a leading automaker into a technology juggernaut — one that combines electric vehicles with autonomous driving, AI, and robotics.

Denholm and other board members framed the plan as a renewal of the 2018 compensation framework — but expanded with “even more aspirational goals,” such as massive EBITDA growth targets and product rollouts.

Supporters, Critics, and Governance Risks

Who Backed the Plan — and Why

Several major investors and notable backers rallied behind the package:

Charles Schwab came out in support, citing alignment of management and shareholder interests.

Baron Capital, run by Ron Baron, praised Musk’s “relentless drive” and argued that no one else could lead Tesla into its next chapter.

Other institutional investors argued that Musk’s vision for robotics, AI, and sustainable energy justifies the high-stakes bet.

Big Opponents

Still, not everyone is on board:

Proxy advisory firms —Institutional Shareholder Services (ISS) and Glass Lewis both recommended voting against the package, citing the “astronomical” size and potential dilution for other shareholders.

Norges Bank Investment Management, which runs Norway’s sovereign wealth fund (and holds a ~1.16% Tesla stake), publicly opposed the plan. The fund worried about dilution, governance risk, and over-concentration of power in Musk’s hands.

Governance advocates argue that the board is too close to Musk and that the deal lacks sufficient safeguards; critics say milestones might be too flexible or loosely enforced.

Musk himself pushed back harshly on critics: during an earnings call, he labelled dissenting proxy advisors “corporate terrorists.”

The Stakes Are Monumental — For Tesla and Musk

A Potential First Trillionaire

If Musk meets every condition, the payout could vault his net worth even higher, potentially making him the world’s first trillionaire.

However, analysts point out that this is not guaranteed. Even if Tesla hits the ambitious goals, once taxes and required payments are factored in, thenet value might be closer to $878 billion.

Massive Risk for Tesla

Business risk: Tesla must not only scale its traditional automotive business but also deliver on robotaxi and humanoid robot production — industries that are still nascent and capital-intensive.

Market risk: Raising Tesla’s market cap to $8.5 trillion would require enormous growth, practically putting Tesla in the ranks of tech behemoths like Apple or Amazon.

Governance risk: Consolidating more voting power in Musk raises concerns about checks and balances. What if he exerts too much influence? Can the board really fire him if things go sideways?

Execution risk: The milestones are bold — 20 million cars, 1 million robots, 1 million autonomous cabs — any slip could mean Musk doesn’t unlock large chunks of the award.

Why Now? The Strategic Context

To understand why Tesla proposed and pushed for such a massive package right now, one must consider Tesla’s evolving identity — and Musk’s ambitions.

From Car Company to AI & Robotics Powerhouse

In recent remarks, Musk has said Tesla’s next mission is to achieve “sustainable abundance” — not just by selling cars, but by building a future shaped by AI and robotics.

He envisions Optimus robots (Tesla’s humanoid bots), autonomous robotaxi fleets, and a Tesla that functions more like atechnology company than a traditional automaker.

The compensation package is clearly calibrated to push Musk to deliver on that vision: it’s not enough to just sell more EVs — Tesla must revolutionize mobility and labor.

Retaining Control

Musk has long expressed a need forgreater voting control. According to his comments, the structure of this compensation plan would bolster his influence, while still leaving some governance levers.

Ensuring that he remains deeply motivated — and difficult to edge out — seems central to the board’s calculus. Losing Musk, according to them, could derail Tesla’s strategic pivot.

Ethical, Governance, and Societal Implications

Executive Pay Ethics

Critics argue that a $1 trillion pay package flies in the face of reasonable executive compensation norms. Even with performance conditions, awarding such an outsized potential payout raises moral and economic questions:

Is such a massive grant justifiable, even if it’s “pay-for-performance”?

What message does it send about inequality, corporate governance, and shareholder democracy?

How will other corporate boards respond? Will this set a new, perhaps dangerous, benchmark?

Concentration of Power

Musk’s increased voting power raises governance red flags. While he claims he needs influence to drive long-term innovation, centralizing power in one person — no matter how visionary — risks undermining board independence.

Long-Term Risk to Shareholders

Shareholders who supported the package are essentially betting that Musk can deliver on disruptive bets: a $8.5 trillion company, a robotaxi network, mass-produced humanoid robots. If he fails, Tesla could be left with diluted equity, high expenses, and unfulfilled hype.

Societal Impact

If Musk succeeds, Tesla’s transformation could reshape entire industries — transportation, robotics, labor. But if it fails, billions of dollars, trust, and opportunity could be lost. The package magnifies not just Musk’s ambition, but the societal risk and reward of his vision.

What Happens Next?

Execution: Tesla must aggressively push into robotaxi networks, scale hardware (robots), and significantly grow its EV business under challenging market conditions.

Monitoring: Shareholders and proxy advisory firms will likely keep a sharp eye on performance and how strictly milestones are enforced.

Governance checks: As time goes on, questions may intensify about whether Musk’s influence is healthy for long-term shareholder value.

Public perception: Both rally supporters and critics will use this deal as a case study — in compensation, tech ambition, and corporate power.

Regulatory scrutiny: Tesla’s bets on AI, autonomous driving, and robotics may attract more regulatory attention, especially if tied to such a huge executive payout.

Conclusion

When Tesla shareholders approved Elon Musk’s $1 trillion pay package, it was more than a compensation vote — it was a declaration of faith. A supermajority backed his vision for a future defined not just by electric vehicles, but by autonomous driving, robotaxi fleets, and humanoid robots.

The board is betting that Musk can deliver on those ambitions — and is willing to stake a historic portion of Tesla’s future on that bet. Whether this will pay off, or become a cautionary tale of hyper-ambition, remains to be seen.